- Warren Buffett’s Berkshire Hathaway built a $4.3 billion stake in Alphabet last quarter.
- The billionaire investor’s company published its third-quarter stock portfolio on Friday.
- Buffett is expected to step down as Berkshire’s CEO before the new year.
Could it be the start of a new era for Berkshire Hathaway before Warren Buffett even vacates the CEO chair?
The famed investor’s company purchased 17.8 million shares of Google’s parent company, Alphabet, last quarter, worth $4.3 billion as of September 30, a regulatory filing revealed on Friday.
Buffett, who famously eschews tech in favor of companies and industries within his “circle of competence,” is set to exit the CEO role before the new year. He has spent the past six decades transforming the failing textile mill into a world-beating conglomerate with a $1 trillion market value, scores of subsidiaries including Geico and Dairy Queen, and huge stakes in household names such as Coca-Cola and American Express.
Berkshire’s third-quarter earnings foreshadowed its portfolio changes. They showed that Buffett and his team spent $6.4 billion on stocks but sold $12.5 billion worth, making them net sellers for a 12th straight quarter.
Buffett, perhaps the world’s foremost bargain hunter, has struggled to find deals in recent years as stocks have surged to record levels, fierce competition has driven up the price of acquisitions, and buybacks have grown unattractive with Berkshire stock near all-time highs.
Berkshire’s coffers have swelled as a result. After subtracting Treasury payables, its cash pile rose to a record $358 billion last quarter. One of the most vital tasks for his successor, Greg Abel, will be putting that war chest to work.
Despite his challenges, Buffett struck an optimistic tone in his Thanksgiving letter to shareholders this week, saying that he still spots the occasional opportunity, and he expects Berkshire to fare well in the years ahead.